The 'nice fairy tale' aka 'bruh, bro or brah' troll is a well known annoyance. Don't feed. There are indeed implications of the ERP buyout people need to anticipate as they begin to do their taxes.
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Fairy tale?? there is no fiction here?? I certainly ended up in the top Tax bracket thanks to the retirement bribe of 1 year of wages. I have been paying AMT for years, my tax preparer is very happy to have so many forms to fill out.
Fortunately since I paid more 2016 taxes than in 2015 and that the "surprise" income came late in the year.
I am told that there will be no penalty for underpayment.
But to be on the safe side, I am not stimulating the economy until I get through the 2016 tax season. I expect to write a 5 figure check, hope they use it wisely, like on roads and bridges.
Nice fairy tale brah
Also, don't forget that accelerated RSUs will be reported as income too. With both lump sum settlement and RSU vesting plus last real paycheck in June, you may have entered AMT territory or at the least, your AGI may disallow any Roth or IRA contribution. This can mean, depending on how many deductions/dependents you have, whether you are single or not, if you are head of household or not, that your tax liability may be higher than you expected and so you may or may not get a refund despite the bonus-level withholding. Just stuff to be aware of.
The FB group is discussing some tax impacts of the lump sum final check for the year's pay, which is different from the MPP choice to receive as either annuity or lump sum.
Please post here, any information you have. I am not going to give Facebook one iota of personal information to exploit.
I took the lump sum pension option, but I had it roll over to my IRA account, no tax until I withdraw. Taking Lump sum as Cash, is only smart if you expect to be in a higher tax bracket, when you are eligible for IRA withdrawals. Paying taxes now, and rolling the lump sum into a Roth IRA account is another option, but then you must have the spare cash to pay the taxes due. I suspect that the optimal strategy would depend on how many years the ROTH would be in existence, before it was tapped.
As for the annuity option, I determined that, with acceptable risk, I could get the same return (and more) by investing is various Mutual funds, and I would still have the principle left to pass on. Acceptable risk will be different for different people and there is a certain amount of active financial management required, which is not for everyone.
Please, this is fyi for real layoff ERP people. Trolls need not respond.